One of the factors credit counseling agencies are facing is the lack of knowledge about debt management programs by consumers.
Americans are in debt and not necessarily because they have been spending in the mall or buying the last excellent “smartphone”. Most of them are in debt because of many causes like loss of income, a divorce, medical illness, or adult parents helping their kids, etc.
Most of them don’t know about a debt management program; in fact, in a recent survey by Money Management International (MMI), only 15% of Americans have used a debt management program.
One of the factors credit counseling agencies are facing is the lack of knowledge about debt management programs by consumers. Because consumers don’t know much about this alternative or solution to get free of debt, they don’t have confidence or trust in this type of agency. Some of the arguments people in debt have been this type of program is going to hurt their credit. The reality is not. A debt management program is not going to hurt your credit. But a debt settlement program, yes.
The difference between a debt management program and a debt settlement program is the first one will negotiate the interest rate creditors charge you to reduce it; you will pay your debt but a low-interest rate. In a Debt Settlement program, the amount of debt is negotiated with a creditor, “Debt settlement is about getting you out of debt for the least amount of money possible” (Debt.com), so in this program, your credit will be hurt.
Credit Counseling Agencies marketers have the challenge of using the right message through the proper marketing funnel.
As you probably know, there are three different stages in a marketing funnel:
- First touch or Top of the funnel: awareness stage
- Second touch or Middle of the funnel: consideration stage
- Third touch or Bottom of the funnel: decision stage
If data tells that only 15% of the people seeking help to get out of debt know about a debt management program, a good marketing strategy should be to generate trust in the consumers.
Top of the funnel campaign should be dedicated to building strong brand awareness by offering information about the credit counseling agency, years in service, why use agency A vs. Agency B, etc. The mid-funnel campaign should be explained in detail the simple steps to enroll in a debt management program and explain program and the benefits. If consumers reach the third stage of the funnel, the credit counseling agency should show a decision-making communication to the potential clients, like showing testimonials, results, and case studies.
Even though a person who enrolls in a debt management program can be in the program for between 3 and 5 years, campaigns shouldn’t stop when a client enrolls. Credit Counseling Agencies should keep in communication with the client, offer a portal to review the progress of the program, send a monthly email letter, and customer service surveys, and at the end, if the client is happy, ask the client for reviews and testimonials.
A key success factor in growing is offering financial education and comparing the positive benefits of a debt management program vs. a bankruptcy process, debt settlement program, or consolidation loan.
If you are looking for a reliable debt relief company, visit Debt.com.
